"JPMorgan Chase CEO Jamie Dimon, who was known as Barack Obama’s favorite banker and who has been a major donor to the Democratic Party, centered his annual letter to shareholders on a denunciation of socialism."
BANKSTER SOCIALISM
Dimon’s bank received tens of billions of dollars in government bailouts and many billions more from the Obama administration’s ultra-low interest rate and “quantitative easing” money-printing policies. He told his shareholders that “socialism inevitably produces stagnation, corruption” and “authoritarian government,” and would be “a disaster for our country.”… UNLESS IT IS SOCIALISM FOR BANKSTERS AND WALL STREET!
Trump criticized Dimon in 2013 for supposedly contributing to the country’s economic downturn. “I’m not Jamie Dimon, who pays $13 billion to settle a case and then pays $11 billion to settle a case and who I think is the worst banker in the United States,” he told reporters.
Fed officials push for new corporate stimulus package
25 September 2020
Federal Reserve officials have launched what amounts to a full court press aimed at ensuring that Congress provides a further fiscal stimulus to corporations, as the COVID pandemic continues out of control and the limited revival of the US economy stalls.
While Fed representatives always couch their remarks in terms of giving assistance to the economy and even to workers, the fall in the stock market since the beginning of the month—the most significant downturn since the plunge in mid-March, when all financial markets froze—is the underlying concern.
Chairman of the Federal Reserve Jerome Powell (AP Photo/Susan Walsh)The push began on Tuesday, when Fed Chair Jerome Powell gave testimony before the House of Representatives Committee on Financial Services. Powell repeated earlier calls for fiscal action, on top of the more than $3 trillion made available under the CARES Act.
He warned that while many economic indicators had shown an improvement, both employment and overall economic activity “remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain.”
Powell said the path forward would depend on “keeping the virus under control, and on policy actions taken at all levels of government”—a call for further stimulus measures.
Pointing to the measures taken by the Fed, which amount to an injection of around $3 trillion into the financial markets, he said they were designed to support the functioning of private markets, and stressed that the central bank had only lending, not spending, powers. While some borrowers would benefit from its programs, for others a loan that was difficult to repay might not be the answer, and in those cases “direct fiscal support may be needed.”
Together with the repetition of the commitment, at the start of his testimony, that the Fed would use all its tools “for as long as it takes,” these remarks temporarily halted the market slide, resulting in a slight upturn after a major fall on Monday.
But the downturn resumed on Wednesday, when the Dow fell more than 500 points, or 1.9 percent, the S&P 500 dropped 2.4 percent and the Nasdaq lost 3 percent. Since reaching record highs in August, the S&P and the Nasdaq have lost 9 percent and 12 percent respectively. There was a slight recovery on Thursday after a volatile session.
The market falls brought forward a series of comments by Fed officials on the need for government action, held up in Congress because of disagreements between Republicans and Democrats over the size and direction of any new measures.
In further testimony on Wednesday, Powell said economic recovery would move faster “if there is support coming both from Congress and the Fed. The power of fiscal policy is really unequalled by anything else.”
Others took up the same theme. In an interview with Bloomberg, Fed Vice-Chairman Richard Clarida claimed the economy had recovered “very robustly,” but added that “we’re still in a deep hole.”
In a speech, Boston Fed President Eric Rosengren said he was less optimistic than others about any recovery, because of both the continuation of the pandemic and the reduced prospects of further government spending.
“Additional support from fiscal policy, which I believe is very much needed, seems increasingly unlikely to materialize any time soon,” he said.
Chicago Fed President Charles Evans told reporters his projection for a fall in unemployment to 5.5 percent at the end of 2021 had been based on the assumption that there would be between $500 and $1 trillion in increased government spending, and that without that he expected higher joblessness and a slower recovery.
Atlanta Fed President Ralph Bostic was another to call for action. He told an Atlanta Chamber of Commerce virtual meeting he was “hopeful that policy makers in Washington as well as at the state level find creative ways to get that support out there.” Without it, he warned, there was a “significant chance” temporary dislocation “can become permanent.”
Cleveland Fed President Lorretta Mester said more government spending was very much needed because of the “deep hole” the economy was in.
But in the absence to this point of any movement from Congress for further bailouts, the comments by Fed officials on the need for more stimulus may be having a destabilising impact on Wall Street.
Quincy Krosby, chief market strategist for Prudential Financial, told the Financial Times: “When you hear that from the raft of Fed speakers, particularly from the top, it is of concern.” The emergence of a second wave of coronavirus infections could have devastating consequences for any recovery and for equity markets, she added.
Krishna Guha, vice-chairman of Evercore ISI, told the Financial Times that the Fed’s “increasingly shrill calls” for more fiscal action were “shaking confidence in the outlook, given the near-certainty that this additional fiscal support will not be forthcoming before January at the earliest.”
As the Fed calls for more government fiscal support, evidence has emerged on how its unprecedented intervention into financial markets, including the indirect and direct purchase of corporate bonds, is aiding major corporations at the expense of workers.
A report prepared by the House of Representatives Select Subcommittee on the Coronavirus released on Wednesday found that the Fed had purchased bonds of corporations that have laid off more than 1 million workers, while paying out dividends to shareholders.
In a damning indictment of the Fed’s actions, the staff of the committee said: “Fed Chair Jerome Powell testified in June that ‘the intended beneficiaries of all of our programs are workers.’ However, the Select Committee’s analysis indicates that many large layoffs have occurred among the companies whose bonds were purchased by the Fed, suggesting that the primary beneficiaries of the program have been corporate executives, not workers.”
According to the report, 383 companies whose bonds were bought by the Fed had paid out dividends and 95 had carried out layoffs. Meanwhile, 227 of the companies had been accused of illegal activity sometime in the previous three years.
Confronted by the evidence gathered by the committee’s staff, the subcommittee chairman, Democrat Jim Clyburn, did his best to hold out some prospect for a reform of the Fed’s program.
“I believe that the terms of the Fed’s purchases of corporate bonds could have been improved so that benefits were equitably shared by workers as well as investors,” he said.
He got short shrift from Powell in his remarks in response to the report. Powell said the corporate bond-buying program had been designed to restore the functioning of private markets and had achieved that goal, as evidenced by the record amount of debt being issued in capital markets.
In its report, the Wall Street Journal said, “Powell implied that the program wouldn’t have achieved such an outcome if it had instead been conditioned on encouraging firms to borrow money in order to save jobs.”
Powell’s dismissive response underscores the fact that actions of the Fed and the Trump administration have never been about saving jobs. They have been directed entirely to maintaining corporate profits, via government bailouts, and providing free money to Wall Street, enabling speculators, investment houses and share traders to rake in money at the expense of workers.
THE ENTIRE REASON FOR OPEN
BORDERS, AMNESTY, NON-ENFORCEMENT, AND NO E-VERIFY IS TO KEEP WAGES DEPRESSED.
IT WORKS!
ALL BILLIONAIRES ARE DEMOCRATS
FOR AMNESTY AND WIDER OPEN BORDERS!
Desperate
to ensure profits, capital has gutted the living
standards
of the working class while engrossing the coffers of
those
at the top through financial parasitism.
Study finds 90
percent of Americans would
make 67 percent
more without last four
decades of
increasing income inequality
25 September 2020
A new study from the RAND
Corporation, “Trends in Income From 1975 to 2018,” written by Carter Price and
Kathryn Edwards, provides new documentation of the profound restructuring of
class relations in America over the last 40 years.
The study, which
looks at changes in pre-tax family income from 1947 to 2018, divided into
quintiles of the American population, concludes that the bottom 90 percent of
the population would, on average, make 67 percent more in income—every year
(!)—had shifts in income inequality not occurred the last four decades.
In other words, any family that
made less than $184,292 (the 90th percentile income bracket) in 2018 would be,
on average, making 67 percent more. This amounts to a total sum of $2.5
trillion of collective lost income for the bottom 90 percent, just in 2018.
Furthermore, the study concludes,
that had more equitable growth continued after 1975 (a date they use as a shifting
point), the bottom 90 percent of American households would have earned a total
of $47 trillion more in income.
Given that there were about 115
million households in the bottom 90 percent of the US in 2018 population (out
of a total of 127.59 million in 2018), that would mean that each of these
households would, on average, be $408,696 richer today with this lost income.
To reach these conclusions, the
authors break down historical real, pre-tax, income into different quintiles of
the population (bottom fifth, second fifth, third fifth, fourth fifth, highest
fifth). Looking at the period between 1947 and 2018, they divide the years
based on business cycles (booms and busts of the economy).
Their data quantitatively
expresses the restructuring of class relations that began at the end of the
post-WWII boom. Facing intensified economic crisis, automation, and global
competition, the US ruling class undertook an aggressive campaign of
deindustrialization, slashing wages and clawing back benefits won in the
previous period by explosive struggles of the working class, while
simultaneously funneling money to financial markets, expanding the wealth and
income of both the upper and upper-middle class.
As the data shows, while the
bottom 40 percent of American households made significant percentile increases
to their income, relative to the top 5 percent, for the 20 years between 1947
and 1968, in the 40 years from 1980 to the present, this trend was reversed. In
1980-2000, the bottom 40 percent of the population experienced a net income
gain significantly below that of the top 5 percent. It must be noted that because
these are percentile increases, the absolute differences between the gains of
the rich versus the poor is far larger.
Furthermore, not included in this
data is wealth. In the last 40 years, and especially the last 10 to 20 years,
the stock market has become the principal means through which the top 10
percent of the population has piled up historic levels of wealth.
Significantly,
the data from 2001 to 2018 shows a sharp slowdown in income gains for all
sections of American society as per capita GDP growth slowed and US capitalism
experienced a historic decline. However, while the income of the top 5
percent of the population may have only grown by about 2 percent between 2008
and 2018, the wealth of
the top percentiles of the population exploded. For example, according to data
from the Federal Reserve of St. Louis, the wealth of the top 1 percent of the
population increased from almost $20 trillion in the first quarter of 2008,
just before the worst of the financial crisis, to almost $33 trillion at the beginning
of 2018.
By using the data, the authors
come up with a set of counterfactual incomes based on what would be the
different income brackets in 2018 without a shift in income distribution. The
top 1 percent, instead of making on average $1,384,000 would make $630,000. The
25th percentile, instead of making $33,000 would make $61,000.
The authors of the study also
make several other important observations by breaking down their data on the
basis of location, education, and race.
For example, they note, “Racial
income disparities below the median have declined over the last four decades.
This has primarily occurred because White men in the bottom half of the income
distribution are earning the same or less than in 1975.” In other words, for
the bottom half of the population, the bulk of the working class, there has
been greater parity between sexes and races in terms of pay as white men’s pay
stagnated and pay for other sections of the working class slightly increased.
While black men in the bottom
25th percentile of the population only increased their income from $27,000 in
1975 to $30,000 in 2018, black men in the 95th percentile, the upper-middle
class, increased their pay from $65,000 in 1975 to $128,000—effectively
doubling it.
Regarding education, they note:
“Because incomes for those without a college degree have not increased more
than inflation over the last forty years, education is frequently touted as a
solution to rising income inequality. However, even for college graduates,
incomes failed to grow at the rate of the overall growth of the economy. Thus,
the economic value of a college degree may largely be in avoiding the negative
outcomes felt by those who do not have one. …”
This saliently expresses what a
college degree has become for most Americans: a necessity to avoid extreme
poverty but in no way a guarantee of a well-paying, stable job.
The authors also note that
“Incomes in rural areas have neither kept pace with the growth in broader
economy nor with urban and suburban areas,” due to “a decline in the economic
health of rural areas.”
The stark class divide expressed
in the report is not the outcome of a single politician or for that matter a specific
party. Rather, it is the policy, collectively, of the entire ruling class, as
American, and indeed global, capitalism entered a period of profound and
protracted crisis. Desperate to ensure profits, capital has gutted the
living standards of the working class while engrossing the coffers of those at
the top through financial parasitism.
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